PARMATMA SHARAN SHIKSHAN SANSTHAN V. UNION OF INDIA AND ORS.

CW/6028/2014

AI Insights

The case revolves around the petitioner, Parmatma Sharan Shikshan Sansthan, a society running an educational institution, which was aggrieved by notices issued by the Income Tax Department demanding payment of Rs. 41.49 lacs and ordering the attachment of its bank account. The demand was initially raised against Vishal Gupta, the then Chairman of the petitioner-Society, due to tax liabilities. However, subsequent appeals by Vishal Gupta led to the setting aside of this demand. Despite this, the Income Tax Department proceeded to recover the amount from the petitioner-Society, leading to the filing of this writ petition. The court found that the recovery actions against the petitioner were unjustified following the setting aside of the demand against Vishal Gupta.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 684513 (HC-RAJASTHAN)
• Appeal Type: Others
• Pronouncement Date: 21-12-2023
• Assessment Year: misc
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Applicant
• Court: HIGH COURT
• Department Lawyers: K K BISSA
• Assessee Lawyers: SHARAD KOTHARI
• Keywords: Bank Account Attachment; Illegal demand; Income Tax; Recovery; Writ petition
• Section: 226(2)(3)

Judgement Text

"[2023:RJ-JD:44824-DB] HIGH COURT OF JUDICATURE FOR RAJASTHAN AT JODHPUR D.B. Civil Writ Petition No. 6028/2014 Parmatma Sharan Shikshan Sansthan 123, Central School Scheme Officers Mess, Air Force Jodhpur. Having Educational Institution at 365, Seth Ji Ki Kundal, Balicha Udaipur. ----Petitioner Versus 1. Union of India,through The Commissioner-Income Tax 16, Mumal Tower, Saheli Marg, Udaipur. 2. Joint Commissioner of Income Tax (Range-I) 6, New Fatehpura, Udaipur. 3. Income Tax Officer Ward 1(1)6, New Fatehpura, Udaipur. 4. Branch Manager State Bank of India, Bus Stand Branch Vinimay Complex, Udaiya Pol, Udaipur. 5. Vishal Gupta S/o Shri Suresh Mohan Gupta Aged 38 years, R/o 6-P-1 Mahaveer Nagar Ext. Kota, Rajasthan. 6. Reena Gupta W/o Shri Vishal Gupta Aged 35 years, R/o 6- P-1 Mahaveer Nagar Ext. Kota, Rajasthan. ----Respondent For Petitioner(s) : Mr. Sharad Kothari For Respondent(s) : Mr. K.K. Bissa, GC HON'BLE MR. JUSTICE VIJAY BISHNOI HON'BLE DR. JUSTICE NUPUR BHATI Order 21/12/2023 This writ petition is filed by the petitioner-Society being aggrieved with the notice dated 25.02.2014 (Annexure-1) under Section 226(2)(3) of the Income Tax Act, 1961 whereby the petitioner-Society is asked to pay a sum of Rs.41.49 lacs due against the respondent No.5-Vishal Gupta. The petitioner is also aggrieved with the show cause notice dated 11.03.2014 (Annexure-2) under Section 226(2)(3) of the Income Tax Act, [2023:RJ-JD:44824-DB] (2 of 3) [CW-6028/2014] 1961, issued to the Branch Manager, State Bank of India, Udai Pole, Udaipur whereby, the respondent Department has asked the bank to attach the bank account of the petitioner-Society. Learned counsel for the petitioner has submitted that a demand of Rs.41.49 lacs was raised against the respondent No.5, who happened to be the Chairman of the petitioner-Society at the relevant time. It is submitted that the respondent No.5 has challenged the said action of the respondent Department by preferring an appeal before the Commissioner Income Tax (Appeals) and the said appeal filed by the respondent No.5 came to be allowed. Thereafter, the respondent-Department has approached the Income Tax Appellate Tribunal (ITAT), challenging the order of the Commissioner Income Tax (Appeals), however, the said appeal also came to be dismissed. Learned counsel for the petitioner has submitted that since the demand raised by the respondent Department against the respondent No.5 has already been set aside by the competent authority, the action of the respondent-department of recovering the amount from the petitioner-Society is illegal. Learned counsel for the respondent is not in a position to dispute the fact that the demand raised by the respondent Department against the respondent No.5 has already been set aside. He has frankly conceded that since the demand raised by the respondent No.5 is set aside by the competent authority, there is no justification for the respondent Department to recover the said amount from the petitioner-Society. In view of the above facts and circumstances of the case, this writ petition is allowed. The impugned notices dated [2023:RJ-JD:44824-DB] (3 of 3) [CW-6028/2014] 25.02.2014 (Annexure-1) and 11.03.2014 (Annexure-2), are quashed and set aside. The respondent Department is directed to refund the recovery amount and is also directed to release the attached Special Term Deposit (STD) to the petitioner-Society within a period of two months from the date of production of certified copy of this order. All pending application(s), if any, also stand disposed of. (DR. NUPUR BHATI),J (VIJAY BISHNOI),J 73-/Devesh/Ajay S.- "